this project seems to be gaining momentum
Old office building at 499 Kent Street sold for over $50 million
A Sydney-based Chinese investor and developer has forked out just over $50 million for a commercial freehold building and site at 499 Kent Street in Sydney with plans for future redevelopment.
Despite a cooling in sales of land and landholdings, the market for well-located sites for commercial and residential development and the pockets of foreign investors continue to show depth.
The net 3 per cent yield struck on the sale of 499 Kent Street is also testament to a liquid capital market still searching for quality investments.
The 1200sq m building is fully leased at a net annual rent of about $1.5 million.
"499 Kent Street drew strong interest from local and offshore investors and developers as it is one of the last development opportunities of this scale within this precinct of Sydney's CBD," Knight Frank's Andy Hu said.
"Situated in a dynamic and highly connected location, with a wide array of amenities on its doorstep, the property offers significant value add possibilities for developers."
Mr Hu brokered the deal with colleagues John Bowie Wilson and Jonathan Vaughan.
The 613sq m site will be able to yield about 8924 square metres of gross floor area, as part of a hotel, serviced apartment or commercial development subject to council approval.
On the section of Kent Street where many outdoor and hiking stores are located, the property sits on the western corridor of the city close to Town Hall station, Barangaroo and Darling Harbour.
The seller of the property, private owner Saatvic Holdings, acquired the building in 2004 for $6.765 million, public records show.
The western corridor of the city, particularly close to Haymarket and Chinatown, has been an epicentre for development site sales. Many of these sites have been planned or earmarked for mixed-use projects involving hotels or serviced apartments.
The shortage of hotels and the shift away from residential development have given rise to these transactions, which include the infamous Sydney Irish pub Scruffy Murphy's sold to make way for a potential 40-storey hotel and residential tower.